Microsoft Files Three Software Piracy Lawsuits In First New England Undercover Sweep

Nine Computer Resellers Reach Settlements in Copyright Infringement Cases

REDMOND, Wash. - Jan. 28, 1998 - Officials of Microsoft Corp. today announced the company has filed three lawsuits resulting from a first-ever investigative sweep of Boston-area computer resellers suspected of installing unlicensed software and illegally distributing counterfeit products via a large East Coast swap meet.

The lawsuits, which charge the companies with copyright and trademark infringement, were filed this month in Boston in U.S. District Court, District of Massachusetts. They are the result of a nationwide campaign initiated last year in key North American regions to combat "hard disk loading," the installation of pirated software on computers sold to customers.

"We investigated 17 companies, are taking legal action against three, and have settled with nine. I think the fact that so many settled shows that these sweeps are having a widespread deterrent effect," said Jim Lowe, corporate attorney at Microsoft. "Resellers are realizing that distributing illegal software is not a fight they're going to win in a court of law."

The companies named in the lawsuits are MCS, dba Bits and Chips, of Whitman, Mass.; Perfect PC Inc., also known as PC Perfect, of Newton, Mass.; and Advanced Communications Technology Inc., also known as ACT Computer, of Natick, Mass.

The products involved included the Microsoft® Windows® 95 operating system and
Office 97 Professional Edition (Office Pro 97). The illegal activities were discovered last September by undercover investigators at a computer swap sponsored by KGP Productions LLC and held at the PC Expo Center in Boston. MCS is alleged to have hard disk-loaded and distributed counterfeit Office Pro 97, Perfect PC is alleged to have hard disk-loaded and distributed counterfeit Windows 95 and Office Pro 97, and Advanced Communications Technology is alleged to have hard disk-loaded Windows 95.

"We're pleased that Microsoft is undertaking these investigations, not only on behalf of distributors such as us, but also on behalf of consumers who may unknowingly be purchasing counterfeit products," said Robert Gregoire, purchasing manager of Advanced Modular Solutions Inc., Boxboro, Mass.

Microsoft receives more than 2,000 calls and e-mails each month that are reviewed by investigators to identify computer resellers and end users that are using or distributing Microsoft software illegally. In addition to increasing enforcement efforts, Microsoft is working to help consumers recognize warning signs that could indicate they are acquiring illegal or counterfeit software, such as the following:

• Prices that are "too good to be true"
• No certificate of authenticity
• Microsoft products on the retail shelf that include a line on the front cover of the users guide that states, "For distribution with a new PC only." Microsoft's agreements with computer manufacturers prohibit them from distributing Microsoft software without accompanying PC hardware. Microsoft does not provide consumer support for this type of product.
• No end-user license agreement
• No product registration card
• No backup disks, manuals or other materials for software installed on a new computer system
• Backup disks that have handwritten labels, are not shrink-wrapped, or appear to be of inferior quality
• Manuals that are photocopied, are not shrink-wrapped, or appear to be of inferior quality

Companies that build PCs and want to obtain Microsoft OEM product for inclusion with their systems should obtain product only from Microsoft's 11 authorized delivery service partners (DSPs). A list of DSPs is available at http://www.microsoft.com/oem/.

Customers or resellers with questions about the legitimacy of Microsoft products should contact the Microsoft anti-piracy hot line toll free at (800) RU-LEGIT (785-3448) or send
e-mail to piracy@microsoft.com or visit Microsoft's Web site at http://www.microsoft.com/piracy/default.asp. To receive more information about software piracy, they can call the Business Software Alliance (BSA) anti-piracy hot line at (888) NO PIRACY (667-4722) or send e-mail to software@bsa.org or visit BSA's Web site at (http://www.bsa.org/).

Founded in 1975, Microsoft (Nasdaq "MSFT") is the worldwide leader in software for personal computers. The company offers a wide range of products and services for business and personal use, each designed with the mission of making it easier and more enjoyable for people to take advantage of the full power of personal computing every day.

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